Legal Question in Business Law in California

Suing a Non-Profit in Small Claims Court

I started a non-profit corp and was awarded a grant to purchase computers. A friend opened a line of credit to buy the computers until I received the check. I made several payments to the vendor and the balance to her. Then she sued the me (the non-profit was listed with me as c/o)for the balance and won. I appealed, but missed the appeal date because I was hospitalized. Now she is suing me again without the name of the non-profit. Can she do this? How can I let the court know the property belongs to the non-profit and not me personally. Can I have the first judgement vacated?


Asked on 2/05/05, 5:23 am

2 Answers from Attorneys

Larry Rothman Larry Rothman & Associates

Re: Suing a Non-Profit in Small Claims Court

At court, just show that this is an additional lawsuit on the same facts and that you personally did not have any contract with her.

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Answered on 2/06/05, 12:14 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Suing a Non-Profit in Small Claims Court

Why was it necessary for your "frined" to sue anyone in the first place? After all the payments you mention, was money still owed? What became of the grant that was supposed to pay for the computers? Were you sued for an unpaid balance due, or something else?

It seems to me that if money was still owed, the answer is not to fight the judgment but to pay it. If indeed the non-profit corporation should have been sued instead of you, and you are paying the judgment on its behalf, perhaps it can reimburse you.

There are procedures for setting aside judgments. See, for example, Code of Civil Procedure section 473(b). Note that it has a six-month time limit.

Finally, note that while the law does indeed distinguish between the property and the liabilities of a corporation and those of its officers, directors, shareholders, members, etc., the distinction can be disregarded where circumstances warrant, e.g. by "piercing the corporate veil," by finding a personal guarantee, or in numerous other ways.

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Answered on 2/05/05, 12:15 pm


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